xAI lost $6.4B last year – SpaceX IPO reveals why spending will continue
▼ Summary
– xAI lost $6.4 billion on $3.2 billion in revenue in 2025, with losses widening from a $1.56 billion loss on $2.62 billion in revenue in 2024.
– Elon Musk merged xAI with SpaceX in February 2025, and plans to take the combined company public with a potential $1.75 trillion valuation.
– Revenue growth in 2025 came mainly from $465 million in AI solutions and infrastructure, including $365 million in X and Grok subscriptions.
– AI capital expenditures reached $7.7 billion in Q1 2026 alone, an annualized run rate of about $30.8 billion, more than doubling year-over-year.
– SpaceX plans to scale Grok to “multiple trillions of parameters” and intends to deploy orbital AI compute satellites as early as 2028.
Elon Musk’s artificial intelligence venture, xAI, recorded a staggering $6.4 billion operating loss in 2025 against just $3.2 billion in revenue, according to newly disclosed financials in SpaceX’s IPO filing. And the red ink is expected to deepen. The filing reveals plans to scale Grok to “multiple trillions of parameters,” a leap that will almost certainly demand massive additional spending on computing power.
Merged with SpaceX in February after previously absorbing the social media platform X (formerly Twitter), xAI is now part of a combined entity Musk intends to take public this year. While AI rivals OpenAI and Anthropic are also eyeing 2026 public listings, SpaceX’s debut is projected to be one of the largest in history, with a potential valuation of $1.75 trillion.
The IPO documents offer the first public look at xAI’s financial performance, and by extension, X’s. In 2024, xAI lost $1.56 billion on $2.62 billion in revenue. By 2025, losses ballooned to $6.4 billion as revenue crept to $3.2 billion, widening the gap between earnings and expenditure. For context, competitor and customer Anthropic expects a 130% revenue surge to $10.9 billion in the second quarter, paving the way for its first operating profit.
Revenue growth from 2024 to 2025 was largely fueled by $465 million in AI solutions and infrastructure revenue, including $365 million from X and Grok subscriptions and $88 million from data licensing. Another $116 million came from advertising.
Capital expenditures for the AI segment jumped from $12.7 billion in 2025 to $7.7 billion in the first quarter of 2026 alone. That translates to an annualized capex run rate of roughly $30.8 billion,more than double the previous year’s pace.
Despite heavy investment, user adoption remains modest. The filing reports 117 million monthly active users for Grok AI features as of March 2026, out of 550 million total MAUs across Grok and X combined. That means only about one-fifth of the ecosystem actively uses Grok’s AI tools.
Nonetheless, SpaceX is pressing ahead. The next-generation Grok is expected to scale to “multiple trillions of parameters,” described in the filing as a “step change in reasoning depth and overall intelligence.” It’s a bold ambition now etched into audited SEC history,and one that will demand even more capital.
The “use of proceeds” section explicitly mentions “expansion of our AI compute infrastructure.” According to the filing, xAI’s Colossus and Colossus II data centers,built in 122 and 91 days, respectively,collectively deliver about 1 gigawatt of compute power, used for both training and inference. SpaceX argues that owning this infrastructure and vertically integrating across the AI stack allows them to “train and iterate frontier models at lower cost and higher velocity.”
Another potential cost-saving measure involves orbital data centers, a sci-fi concept Musk has promoted as a cheaper alternative to terrestrial facilities. The filing sets the first concrete timeline: SpaceX intends to begin deploying orbital AI compute satellites as early as 2028.
“The future of AI will be determined by control of the physical stack,” the filing states.
(Source: TechCrunch)
